It can be a complicated process to file for personal bankruptcy. There are multiple ways you can file for bankruptcy, and the one that best fits you will depend on your financial situation and what you owe. That’s why you should research personal bankruptcy prior to deciding whether or not you should file. The advice in this article can be a good starting point for you.
Do not use a credit card to pay income taxes and then file for bankruptcy. In some places the debt can not be discharged, and you may still need to pay the IRS afterward. The rule here is that if you can get the tax discharged then you can get the debt discharged. Just because your credit card could be discharged in bankruptcy does not mean you should use it.
Ask yourself if filing for bankruptcy is the right thing to do. You have other choices, including consumer credit counseling. Be certain that bankruptcy is the only option you have before pursuing this course because bankruptcy is always evident on your financial and credit history.
Always be honest when filling out paperwork. Not hiding any assets or income is essential for avoiding possible penalties and your ability to re-file at some point in the future.
Prior to filing for bankruptcy, research which assets will remain exempt from creditors. The Bankruptcy Code has lists of various asset types that are exempt during the process. You need to compare this list to the assets you own so that you are not surprised when certain assets are seized. If you don’t heed that advice, you might find yourself getting surprised when your favorite things are repossessed.
There is hope! You might even be able to get back secured property that has been repossessed in the 90 days before filing. If it has been 90 days or less between the repossession of your property and your filing, you might be able to get your property back. Talk with an attorney who can guide you through the process of filing a petition.
If you are seriously thinking of filing bankruptcy, make sure that you contact an attorney. You might not understand all of the various aspects to filing for bankruptcy. An attorney specializing in personal bankruptcies can assist and make certain things are being handled correctly.
Chapter 13 Bankruptcy
Understand the differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is intended to wipe out all outstanding debts. With very few exceptions, the connections between you and your creditors will be severed. Chapter 13 bankruptcy allows for a five year repayment plan to eliminate all your debts. You must know about the different bankruptcy types, and how each can affect you.
Find out if you can use Chapter 13 bankruptcy, as it may help you better than the other laws. If you posses a regular source when it comes to income, and you have less than $250,000 of unsecured debt, you could file using Chapter 13 bankruptcy. This will allow you to keep your personal property and real estate and repay your debts via a debt consolidation plan. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. However, if you are unable to properly commit to the plan you agree to, your case can be dismissed.
If your paycheck is larger than your debts, avoid filing for bankruptcy. Filing for bankruptcy can really damage your credit in the long run, by staying on your report for up to ten years.
Once you clear the hurdle of filing for bankruptcy, live a little, but not too much. Many debtors stress-out during the time of filing. This stress could morph into clinical depression, if you fail to adequately address the problem. You must realize that things will get better over time.
Know your bankruptcy rights. Many creditors or bill collectors might tell you your debts cannot be included in a bankruptcy. Only a few kinds of debt, like student loans or child support, are ineligible for bankruptcy. If a collector tries to convince you that some other type of debt, such as a credit card, is non-discharagable, get the company’s information and send a report to your state attorney general’s office.
Now you know that filing for bankruptcy requires a lot of thought. If you feel that it is your best option for your current financial state, you should contact an experienced bankruptcy lawyer who can advise you in this turning point in your life.